In a decision that built upon Public Justice’s 2005 landmark win for consumers in Discover Bank v. Superior Court (Boehr), the California Supreme Court held in Gentry v. Circuit City that if a class action ban would prevent employees from vindicating their rights to overtime pay, the ban cannot be enforced under California law.

Public Justice filed an amici curiae brief arguing that a class action ban could prevent workers with valid wage-and-hour claims from having a meaningful chance of pursuing those claims. The amici brief, which was joined by several other public interest organizations specializing in representing low-wage workers, explained that several factors might prevent workers from obtaining justice on an individual basis. 

Citing many of the “real world obstacles” described in the brief, the court agreed,
concluding that, where a class action would be a “significantly more effective” means of obtaining justice than bringing an individual case, a class action ban cannot be enforced.

“This is a great decision for California workers,” said Public Justice’s Brayton-Baron Attorney Leslie Bailey, who helped with the amici brief. “The court recognized that class actions play a critical role in ensuring that state worker protection laws are enforced.”

The case arose when Circuit City allegedly misclassified certain employees, including the named plaintiff, as “exempt” and thus not entitled to overtime pay. 

In holding that Circuit City’s class action ban cannot be enforced if it would exculpate the corporation from liability under state labor laws, the court made clear that its holding in Discover Bank – which was argued by Public Justice’s Paul Bland – applies with equal force in the employment setting. 

In Discover Bank, the court held that a class action ban in a consumer contract cannot be enforced if it would prevent consumers from being able to hold the corporation accountable for cheating them out of small amounts of money. The Gentry decision made clear that the principle established in Discover Bank – that “exculpatory” contract terms will not be enforced – applies outside the context of small-dollar consumer claims.
  
The court remanded the case to the trial court for a determination of whether a class action or class arbitration would be a “significantly more effective practical means” for employees to vindicate their rights, and whether permitting Circuit City to ban employee class actions would “lead to a less comprehensive enforcement of overtime laws.” 

Public Justice’s amici brief was written by Joseph Jaramillo and Laura Ho of Goldstein, Demchak, Baller, Borgen & Dardarian, with input from Public Justice’s Bailey, Bland, and Victoria Ni.  The brief was filed as part of Public Justice’s Access to Justice Campaign and Class Action Preservation Project.